U.S., EU Reach Agreement to Open European Market to U.S. Services Companies
The United States and the European Union have concluded an agreement that will provide new commercial opportunities for U.S. banks and other service providers in the 25-nation EU, U.S. Trade Representative Susan C. Schwab announced Sept. 25.
Schwab said that the agreement, which is designed to compensate the United States for trade lost as a result of a number of countries, including Austria, Poland, the Czech Republic, and Sweden, joining the EU, will further open the $8.6 trillion European services market to U.S. firms through modifications to the EU's commitments under the World Trade Organization's General Agreement on Trade in Services (GATS).
"This agreement demonstrates the value of the multilateral process and how the U.S. and other WTO members continue to work constructively together in that forum," Schwab said. "This is the first time that any WTO member has used the procedures for modifying GATS commitments."
Work With Other Affected Members
Schwab said the United States has worked with Canada, Hong Kong, Brazil, Japan, and the other 16 affected WTO members over the past three years to make procedures work. "We are pleased that this cooperative effort has produced a meaningful compensation package whereby the EU and its member states will offer new opportunities in financial services, engineering, computer services, advertising, and other service sectors,"
USTR said that the EU had requested modifications to its commitments under the GATS resulting from the accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Austria, Poland, Slovenia, the Slovak Republic, Finland, and Sweden to the EU.
It said that each of these countries had previously undertaken commitments individually under the GATS, and in harmonizing their individual commitments with those of the EU as a whole they had to modify their laws and regulations in a way that made their laws inconsistent with their prior commitments.
USTR said that the GATS allows WTO members to modify or withdraw commitments provided that they negotiate offsetting compensation so that the overall level of market access remains the same.